Written By:
mickysavage - Date published:
11:28 am, February 4th, 2025 - 50 comments
Categories: Donald Trump, Free Trade, International, trade, us politics -
Tags:
Internationally Canadians are held in similar regard to New Zealanders. They are polite and friendly. They are good international citizens. They get involved in wars when freedom is at stake. And they respect human rights and the rule of law.
And they are free traders. They recognise the importance of free and open markets and the removal of trade barriers.
Which is why Donald J Trump’s imposition of tarriffs on Canada is so weird.
Sure there is a trade imbalance. In 2023 the difference was $41 billion USD. However, if energy was excluded, the US ran an overall trade surplus of $63 billion USD. Canadian oil is all important to US gas guzzlers.
But lumping Canada and Mexico together was weird.
Trump obviously has his points of contention with Mexico. He is obsessed with illegal immigrants and gangs and gangs and drugs in particlar Fentanyl.
But Canada’s contribution to the US Fentanyl problem is, according to law enforcement and drug policy experts, minimal.
And the weirdness of Trump’s actions is heightened by recent news that he has suspended the imposition of tarriffs on Mexico by one month.
This is after Mexican President Claudia Sheinbaum agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States to address illegal immigration and fendanyl imports.
So why will he not cut a deal with Canada? In his own words:
We pay hundreds of Billions of Dollars to SUBSIDIZE Canada. Why? There is no reason. We don’t need anything they have. We have unlimited Energy, should make our own Cars, and have more Lumber than we can ever use. Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada — AND NO TARIFFS!
It seems that Canada’s desire to retain its independence is the cause of Trump’s anger.
He used the International Emergency Economic Powers Act to impose the tarriffs. And cited illegal aliens and fentanyl as the justification. I suspect the American Courts will be looking into this soon.
How has this Government responded to this attack on a fellow Commonwealth nation with which we have had a strong historical relation and whose interests mirror our own?
It has been really gutless.
Todd McClay was interviewed on Morning Report this morning and steadfastly refused to make any adverse comment about Trump’s behaviour. In fact he was protective of Trump.
Dann – Should we though as a country which has had a track record of fighting for free trade, we helped develop and started the CPTPP trade agreement, we have been an advocate in the world for a rules based order, should we not be standing with Canada and condemning this use of tarriffs by the US administration?
McClay – Well two things here. Firstly we have had a lot of engagement with the new administration at an official level, the Prime Minister has spoken to the President, and Winston Peters with his counterpart. What our exporters are saying to me is that they want to make the case to the US about how balanced our trade is, that it is complimentary and that there are ways to grow the trade between the two nations that is good for both of their economies. And that is very much where the focus will be. In as far as Canada is concerned you are right that tarriffs themselves can be harmful but you should also remember that we have a dispute with Canada over not giving us dairy access that they owe us under the CPTPP. We too have reserved the right to take any action where we think is deemed appropriate. We are currently discussing negotiating with them and we have not ruled out tarriffs if they don’t meet their obligations.
Luxon also refused to criticise America. He said:
Each leader acts in his own national interest, right. President Trump has been elected with a mandate like all leaders to act in their National interest. I’m acting in New Zealand’s national interest which is why I am pushing trade and investment hard.
It seems that Luxon views Canada’s plight as a trade opportunity and not an opportunity to offer international solidarity.
So much for International Solidarity and Principle.
The feeling that the Government is afraid of the Orange one is also very strong. Self interest coupled with fear make a compelling combination.
The European Union is now in Trump’s sights. It seems that in his eyes everything is an opportunity to stitch together a deal. And trashing historical norms don’t matter. The only thing that matters is how far he can advance his interests.
Hang on tight. This is going to get rough.
Update: And Trump has caved. Trudeau has agreed to measures to address a non existing drug issue and Trump has paused the tarriff by 30 days.
I also suspect that the stock market crashing played a major part in this. It crashed pretty heavily a day ago but has since rallied.
Second update: The basis of the deal had been negotiated by Biden and announced by Trudeau last December. Trump is taking credit for something that was happening already.
Canada and Mexico make a huge proportion of the US-assembled automotive industrys parts . The main reason is that labour costs are much cheaper in Mexico, and Canada, while a bit cheaper on labour it probably has cheaper services such as power and taxes etc. Trump thinks that’s unfair, Ford, GM, Stellantis etc almost certainly don’t. Crucially it’s almost certainly a “ Just-in-time” delivery system so within 10 days the entire US automotive industry may grind to a halt. Why is he picking a fight with one of the USAs primary industries? Who would know but it will also affect the transportation industry and many many others. It just looks like a game , a stupid childish game that he is playing purely for his own grandisment.
AFAICS, Trump is not proposing to close the border, 'just' to increase tariffs.
Which would make those automotive parts more expensive to source from Mexico (I'm not sure of Canada's contribution here).
In the short term Ford, GM, etc – will scream bloody murder, but just go on buying – because they don't have an alternative source. They will, however, also increase their prices to consumers – so are unlikely to 'lose' money.
What remains to be seen is whether it becomes economic for the US to build factories and create jobs to make those automotive parts within their own borders. That's what Trump is hoping for. And, if it plays out that way, would be a massive boost to his voting base (increased blue-collar jobs)
I don't know if his approach will work. But it's not a stupid childish game. It's an attempt to get an outcome that is strongly desired by his voting base.
It's a game being played by a bunch of fascist millionaires and billionaires whose motive is power for themselves and power over the rest of us. The Chief Fascist is now trumpeting loudly over South Africa, claiming it's an apartheid regime against white people. He's a white supremacist and now sees himself as King of the World.
As for his voting base, the majority of them are to be polite… dumb. They can't in truthfulness be described any other way. They are in for one hell of a shock when it finally dawns on them he doesn't give a stuff about them and actually hates them – especially if they are black.
And attitudes like that from the Left is why US voters support Trump.
Describing people as 'dumb' because you disagree with their politics, is not precisely the brightest way to treat people.
If you (as in the Left – including the Democrats in the US) can't bring yourselves to understand what the political issues are for the people who voted for Trump at the last election – there is very little chance that you'll be able to turn that election result around.
Regardless of what you think of Trump – this can very much be seen as an attempt to bring manufacturing (AKA blue collar jobs) back to the US – and (if it works – jury is still out for me) – would be highly popular with that support base.
Read the first paragraph only. Thought you would bite the bullet.
They are dumb and you know it. It shows every time they open their mouths. It's not entirely their fault. Overall, the US has very average education standards.. Some States maybe better than others, but poor education standards begets ignorance and poor cognition. And that's what you've got among a large portion of the Trumpites.
You can argue the toss until the cows come home and you no doubt will, but we all know that is part of a game of one-up-man-ship you like to play here.
And Trump intends to keep it that way!
Appalling!
So, it would seem Donny boy and his band of thugs have already succumbed to the effects of lead poisoning and TCE. At least their brain- dead ignorance suggests as much.
I suppose common-garden chloride and fluoride will be next on the list. We are descending back in time to the days of the cavemen and women in more ways than one. Hell… the chief thug even looks like one dressed in a suit.
Anne – I owe you an answer to a question but my old and tired brain can't find it anymore.
I'm so sorry for that.
Just go on digging. Those 'dumb' people have just as much voting power as the 'smart' ones you profess to admire.
And, by alienating them, you pretty much guarantee they won't vote for you (as in the wider left you –there is zero chance any of them will be voting for you in person).
Makes you wonder who's dumb, here.
And, so sorry that your short-term reading comprehension skills mean that you can only read the first paragraph. You must miss out on so much.
Canada only want free trade if it suits them, not our fight,
Eh? Of course it's not our fight – it's an observation of the dictatorial nature of Trump's rule, decisions on tariffs that the ultra conservative WSJ calls the "stupidest trade war in history" and their treatment of one of the US's closest allies that have stood with them through bloodshed and brotherhood through generations.
It's the casting of a new world order and the elevation of Russian interests above those of Western allies.
It's more than significant.
I see he's paused it, guess he wants something from Canada, he sure got a response from Mexico, I have sympathy for any country that's getting inundated by invading immigrants that can just hop the boarder, we're lucky we've got the biggest moat in the planet.
I'll back Canada against Trump, but before we get too misty-eyed and sentimental about it, Canada is doing much the same to our exports in violation of the CPTPP.
And I believe NZ wasn't fair to Samoa when our navy ship sunk there.
It seems to be the way of all nations: might over right.
I see both countries are now on a "pause" for 30 days and spending gazillions sending troops to the border between Mexico and the US and in Canada a billion dollars also on stopping "drug trafficking" between Canada and the US, which is a fekking fiction anyway. Mexico did get a good score back on limiting the traffic of guns from the US to Mexico. Sadly, Trump will see this as a win and continue to throw his dumbarse weight around. But there's so much more. The stopping of US Aid, the locking out of Federal Employees and the takeover by Musk and mates of access to trillions of $$ and all of the personal information stored
This will not end soon, sorry to say.
It just shows the world bullying works, doesn't it, Darien?
It does not cost much to move troops to a nations border.
And Canada needed better border control while Trump is POTUS (Americans and illegals fleeing north).
Less than 1% of drugs and illegal crossings come from Canada.
So try again.
But I did like the nice touch – Canada will appoint a "Fentanyl Czar" – that was definitely a nod to Trump's tastes.
I’m betting Trump has business people around him begging to stop the madness so he’s bought himself some time.
Try what again? And why?
I think your remark was to subtle for him to understand.
Personally I thought it was very clever.
alwyn is right – not enough sleep, cranky, and skimmed it too fast.
I re-read it and owe you a sincere apology on this one, SPC. No excuse but apologies regardless.
I don’t think the Canadians are being weak-kneed. They’ve likely crunched the numbers and decided that a tariff’s damage would far outweigh the cost of a hollow, performative gesture toward solving a non-existent problem.
With Trudeau already resigned, there’s also zero political risk. If it works, it’s a final heroic act from a Prime Minister who’s tried to do right by Canadians despite right-wing hysteria. If it fails, it can be safely disowned by his successors.
Sure, they could have probably held the line and watched it backfire on Trump. But given his penchant for tantrums and inability to lose gracefully, would that be a sensible option?
Don't disagree with you at all on any of that, Res Publica!
https://www.washingtonpost.com/world/2025/02/03/mexico-tariff-retaliation-trump/
The border security upgrade was designed to keep fleeing illegals and Americans out.
Can you blame them?
So, nothing of any substance then?
I believe that Trump had already comprehensively demonstrated that over Panama.
I think Musk is a major concern with the propaganda and administrative power he has with Big Tech, social media and his role in the Department of Government Efficiency. The Goebbles of the digital age.
As a firm believer in realpolitik in international relations, I’m genuinely torn.
There’s a certain irony in seeing Canada as the victim rather than the perpetrator of questionable trade practices. We’ve often been on the receiving end of their ruthlessness, despite our Commonwealth ties.
As a small state on the edge of nowhere, we don’t have the luxury of an independent or ethically driven foreign policy. Good diplomacy often means partaking in a veritable buffet of dead rat.
So why provoke Trump unnecessarily?
But on the other hand, I worry this is the thin end of the wedge: a litmus test. If we don’t defend free trade and a rules-based order in Ottawa or Mexico City, we’ll have to do it in Berlin and London. And if not there, who will stand for us in Wellington?
If we’re looking for a moral compass in the coalition’s foreign policy, we’ll be disappointed. It’s already been sold for parts.
History of trade disputes tell us that no one (among the powerful nations) will stand up for us. Did the EU tell France to back off over the threatened trade sanctions following the Rainbow Warrior? I think not….
That’s a fair point!
But at this stage, it’s not just about whether bigger nations will stand up for us in trade disputes—it’s about whether an international order will exist to manage these disputes at all.
Small states can either hang together, or Trump and his ilk will make sure we hang separately.
So in the course of 2 weeks Trump has set back global 2025 gdp growth due to causing massive investor anxiety in both the AI tech sector and across Europe, Canada, US, Mexico and Chiba.
Trump is a mess not a deal maker.
Faster NZTE and MBIE and Fonterra redouble towards East and South Asia the better.
Which in itself is not 100% risk free, and relies on someone maintaining a reasonably level playing field for us to compete.
If this is a sign that the USA is unilaterally abandoning the global consensus on free trade, I don't know if there is a market we could ever be confident is a safe bet.
The one thing Luxon can never, ever say is: "John Key was wrong". Luxon would be toast. The Nats don't love him, but they did love Key.
So of course Luxon (and McClay and the rest) can't stand up and criticise Trump.
But the rest of us should never forget that Trump got the explicit endorsement of Key … and nobody in National dared to demur.
https://www.stuff.co.nz/politics/350434743/why-sir-john-key-thinks-donald-trump-should-win-us-election
They both knew traders are supercool. So what's the market rate for these folks?
See the synergy? The deal will be whatever the US wants in exchange for US citizenry & states's rights. On the surface! Underneath, a sufficient bribe…
Or they could float Greenland on the market as well. Make it a corporation legally, retain special shares for the Greenlanders specifying their take of the consequent corporate trading, while allowing the world to invest as partners. They could hire Key to be a consultant on the ops side of things…
There is a Treaty kicking around somewhere which says that if Denmark want to quit Greenland, Great Britain has the right of first option.
https://www.npr.org/2025/01/28/nx-s1-5276173/denmarks-greenland-uk-trump
It's personal.
/
More likely than not!
There's another one with Ivanka too. Poor Justin.
Apparently the border plan was announced in December – sounds to me like Trump's getting a little scared of his own threats
https://bsky.app/profile/acyn.bsky.social/post/3lhck4lvsdc2u
If Trump can sort out the problems in the US with a trade war rather than a shooting war he will be venerated.
I read this popular substack to find out what is happening in the big tech companies and was today surprised to read the authors 180 degree reversal on his position re tariffs.
https://pomp.substack.com/p/welcome-to-the-tariff-era-the-truth
In the neoliberal era we have all been taught that tariffs are bad and that nations should do what they do best and trade for the rest of what they need.
Neoliberalism produced globalism which had very definite winners and losers. And blue collar American workers were among the biggest losers
Maybe Trump can pull this off.
Big BIG hole in that narrative, starting with solar panels. Graphs running past 2020 must include Biden's clean energy stimulus which gave tax credits for adoption of PV systems. So implying that the '26% rise over a decade in PV systems' is due to Trump’s tariffs is mighty disingenuous.
Similarly, Biden supported the US steel industry by prioritising tax breaks for US producers supplying his infrastructure and clean energy investment initiatives.
'…Scott Paul, president of the Alliance for American Manufacturing, said that the combined force of the CHIPS Act, the IRA and the bipartisan infrastructure law will boost steel demand in the US.'
The story at your ref that Trump's tariffs were a magic bullet for US industry is one-sided, to say the least. Tariffs may help, admittedly, but there were no huge tariff tit-for-tats in response to Trump's tariff policy in his first term. So can't predict effects this time around from before.
Similarly, Biden supported the US steel industry by prioritising tax breaks for US producers supplying his infrastructure and clean energy investment initiatives.
'…Scott Paul, president of the Alliance for American Manufacturing, said that the combined force of the CHIPS Act, the IRA and the bipartisan infrastructure law will boost steel demand in the US.'
So the story at your ref that Trump's border tariffs were a magic bullet for US industry is one-sided, to say the least. Tariffs may help, admittedly, but there were no huge tariff tit-for-tats in response to Trump's tariff policy in his first term. So can't predict this time around from previously.
Just because Trump's last term tariffs didn't upset things much, can't assume the same tjis time around:
Ooh look: China has slapped tariffs on US immediately, as well investigating google and restricting rare-earth exports.
' …to safeguard national security interests” the country was imposing export controls on a raft of chemical elements with varying commercial applications: tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items.
Mexico-EU trade relations were updated this Jan: the EU is Mexico's 3rd largest market, and Mexico has a FTA with them since 1997.
Canada's EU agreement is pretty close to non-tariffed.
Because Anthony is an investor so he must know something, right? Or might just be flogging a get rich quick book.
/
Here's a much better, well-rounded discussion of probable tariff effects from the US Council on Foreign Relations. Covers the whole gamut of economic and political ramefications.
From Trump’s first term tariff war:
‘The president’s statements do, however, check out on his other point. American farmers have indeed laid claim to nearly all his China tariff revenue, which now totals $66 billion.
The president is therefore right when he says farmers “got” his tariff money. That money came not from China, however, but from taxes he imposed on Americans.’
Call me cynical, but if you knew in advance what the playbook said, you could make a lot of money from the stock market dive and in a week's time everything is back to normal.